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Turnaround specialist Day, 52, who created his retail empire – which owns Peacocks and Jaeger – by taking over failing firms, is one of several potential investors interested.

Viewed by some as the new king of the High Street, Day, worth £1.2billion, grew up on a council estate in Stockport and worked part-time at his parents’ newsagents shop while he was at school.

He later remortgaged his home to help private equity firm Rutland Partners buy Edinburgh Woollen Mill in 2001, and later bought out its share.

The group now houses a number of brands he brought back from bankruptcy including Austin Reed, Ponden Home and Jane Norman. The business is thought to be worth around £1billion.

The Edinburgh Woollen Mill owner opened his first department store, Days, last year in a former BHS in Carmarthen, west Wales, and is said to be keen to open more. Day employs 24,000 people, mostly in the UK.

Any attempt to bid for House of Fraser is likely to pit Day against Ashley, who is also reported to have approached the group with a £50million lifeline. Talks are said to have reached a sticking point between the two parties but the tycoon is understood to still be interested.

Ashley, 53, who also owns Newcastle United Football Club, owns 11 per cent of House of Fraser and stakes in various other retailers.

The tycoon is a likely suitor after previously attempting to grab control in 2014, which was scuppered by a £480million bid by current owner Sanpower.

The Chinese conglomerate has been fighting to prop up House of Fraser since it took over, pumping in millions.

Plans to roll out the brand in China have been slower than anticipated, with just two shops opening since 2014 in contrast to the 50 planned.

It managed to strike a deal with C Banner last month, which agreed to take the reins and provide funding if House of Fraser closed half its 59 stores.

But the restructuring plan collapsed shortly after when a group of shop landlords launched a legal challenge in court, saying they had been treated unfairly.

House of Fraser has since filed an objection to the challenge but is still waiting for a formal date to dispute it in court.

It is said to be in desperate need of extra cash so it can pay its rent bill, due in September, and buy stock for the crucial Christmas trading period.

If it fails to find a buyer, House of Fraser will probably join the ranks of Toys R Us, Poundworld and Maplin, which have all gone bust this year.

Its collapse would be the biggest retail failure in a decade, after Woolworths crashed into administration in 2008, resulting in 800 store closures and more than 27,000 job losses. House of Fraser and Edinburgh Woollen Mill declined to comment.